F.I.F.A. – Players’ Status Committee / Commissione per lo Status dei Calciatori – players’ and match agents disputes / controversie agenti di calciatori – (2018-2019) – fifa.com – atto non ufficiale – Decision of the Single Judge of the Players’ Status Committee passed in Zurich, Switzerland, on 7 March 2019

Decision of the Single Judge of the Players’ Status Committee

passed on 7 March 2019,

by

Mr Geoff Thompson (England)

Single Judge of the Players’ Status Committee,

on the claim presented by the club,

Club A, Country B,

as Claimant

against the club,

Club C, Country D,

as Respondent

regarding a contractual dispute

between the parties in connection with overdue payables

I. Facts of the case

1. On 17 July 2016, the Club of Country B, Club A (hereinafter: Claimant), and the Club of Country D, Club C (hereinafter: Respondent) signed a transfer agreement regarding the transfer of the player, Player E (hereinafter: player) from the Claimant to the Respondent.

2. In accordance with the transfer agreement, the Respondent undertook to pay to the Claimant the amount of USD 4,000,000 as follows: USD 1,000,000 “within 48h after the receipt by Football Federation of Country D (Football Federation F) if the International Transfer Certificate of the player (..)”; USD 750,000 on 31 January 2017; USD 750,000 on 31 July 2017; USD 750,000 on 31 January 2018 and USD 750,000 on 31 July 2018.

3. On 3 May 2017, the Claimant and the Respondent signed a settlement agreement as a consequence of the Respondent having so far only paid the first instalment in the amount of USD 1,000,000 due as per the transfer agreement.

4. In accordance with the settlement agreement, the Respondent undertook to pay to the Claimant, USD 3,050,000 (corresponding to the outstanding sum of USD 3,000,000 plus USD 50,000 as interests accrued) as follows: USD 200,000 by 15 May 2017; USD 600,000 by 31 July 2017; USD 350,000 by 30 September 2017; USD 400,000 by 31 October 2017; USD 750,000 by 31 January 2018 and USD 750,000 by 31 July 2018.

5. In addition, art. 5 of the settlement agreement stated the following: “in the event of failure, delay or partial payment by Club C of any of the above-mentioned instalments for more than 15 days beyond the time limits established in this Settlement Agreement, then the whole of the remaining payments will become immediately due and payable, and the interests of 10 % p.a. shall apply.”

6. By correspondence dated 21 November 2018, the Claimant put the Respondent in default of payment of USD 1,500,000, corresponding to the fifth and sixth instalments due as per the settlement agreement, setting a 10 days’ time limit in order to remedy the default. In the same correspondence, the Claimant also requested the Respondent to pay, within the same deadline, “interest of 10% p.a. on the amount of USD 1,900,000 for the period from 16 October 2017 through 9 January 2018” arguing that the “third instalment of USD 350,000 originally due by

30 September 2017 was paid by Club C (together with default interest of USD 4,340) on 5 December only; the fourth instalment of USD 400,000 was paid on 9 January 2018.”

7. On 4 December 2018, the Claimant lodged a claim against the Respondent in front of FIFA asking that the Respondent be ordered to pay overdue payables in the amount of USD 1,500,000 corresponding to the fifth and sixth instalment due as per the settlement agreement.

8. In addition, the Claimant requested that the Respondent be ordered to pay, in line with art. 5 of the settlement agreement 10% interest p.a. on the amount of USD 1,900,000 “for the period from 16 October 2017 through 9 January 2018 equal to USD 44,767”, since all remaining instalments fell due as of 16 October 2017. The Claimant clarified in this regard that the third instalment, “originally due by 30 September 2017” had only been paid on 5 December 2017 and the fourth instalment of USD 400,000 was paid on 9 January 2018.

9. The Claimant further asked to be awarded interest of 10% p.a. on the sum of USD 1,500,000 as from 10 January 2018.

10. In reply to the claim, the Respondent acknowledged owing the sum of USD 1,500,000 and requested to be able to pay the amount in 8 instalments considering its current difficult financial situation. In addition, the Respondent contested the request of the Claimant related to the payment of 10% interest for being excessive and requested FIFA to reduce them.

11. The Claimant rejected such proposal and requested FIFA to take a decision in the matter at stake.

II. Considerations of the Single Judge of the Player’s Status Committee

1. First of all, the Single Judge of the Players’ Status Committee (hereinafter: the Single Judge) analysed whether he was competent to deal with the matter at hand. In this respect, he took note that the present matter was submitted to FIFA on 4 December 2018. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2018; hereinafter: Procedural Rules) are applicable to the matter at hand (cf. art. 21 of the Procedural Rules).

2. Subsequently, the Single Judge referred to art. 3 par. 2 and par. 3 of the Procedural Rules and confirmed that in accordance with art. 23 par. 1 and par. 4 in conjunction with art. 22 lit. f of the Regulations on the Status and Transfer of Players (edition 2018) he is competent to deal with the present matter, which concerns a dispute between two clubs affiliated to different associations.

3. Furthermore, the Single Judge analysed which regulations should be applicable as to the substance of the matter. In this respect, he confirmed that in accordance with art. 26 par. 1 and par. 2 of the Regulations on the Status and Transfer of Players (edition 2018), and considering that the present claim was lodged on 4 December 2018, the 2018 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the Single Judge and the applicable regulations having been established, the Single Judge entered into the substance of the matter. In this respect, the Single Judge started by acknowledging all the above-mentioned facts as well as the arguments and the documentation on file. However, the Single Judge emphasised that in the following considerations he will refer only to the facts, arguments and documentary evidence, which he considered pertinent for the assessment of the matter at hand.

5. Having said this, the Single Judge acknowledged that the Claimant and the Respondent signed a transfer agreement, in accordance with which the Claimant was entitled to receive from the Respondent, inter alia, the total amount of USD 4,000,000.

12. Furthermore, the Single Judge took note of the fact that, later on, the parties to the present dispute also signed a settlement agreement in accordance with which the Respondent had to pay to the Claimant the amount of USD 3,050,000 as follows: USD 200,000 by 15 May 2017; USD 600,000 by 31 July 2017; USD 350,000 by 30 September 2017; USD 400,000 by 31 October 2017; USD 750,000 by 31 January 2018 and USD 750,000 by 31 July 2018.

6. Equally, the Single Judge remarked that, as per art. 5 of the settlement agreement, “in the event of failure, delay or partial payment by Club C of any of the above-mentioned instalments for more than 15 days beyond the time limits established in this Settlement Agreement, then the whole of the remaining payments will become immediately due and payable, and the interests of 10 % p.a. shall apply.”

7. The Single Judge further acknowledged that the Claimant lodged a claim against the Respondent in front of FIFA, maintaining inter alia that the Respondent has overdue payables towards it in the total amount of USD 1,500,000, corresponding to the fifth and sixth instalments payable under the settlement agreement.

8. In this context, the Single Judge took particular note of the fact that, on 21 November 2018, the Claimant put the Respondent in default of payment of the aforementioned amount, setting a time limit expiring on 1 December 2018 in order to remedy the default.

9. Consequently, the Single Judge concluded that the Claimant had duly proceeded in accordance with art. 12bis par. 3 of the Regulations, which stipulates that the creditor (player or club) must have put the debtor club in default in writing and have granted a deadline of at least ten days for the debtor club to comply with its financial obligations.

10. Subsequently, the Single Judge took into account that the Respondent, for its part, had acknowledged owing the sum of USD 1,500,000 to the Claimant and had requested to pay the relevant amount in instalments alleging that it was undergoing financial problems. In the same context, the Single Judge further remarked that such request of the Respondent had been rejected by the Claimant.

11. In this regard and considering the content of the Respondent’s response, the Single Judge acknowledged that the Respondent was obliged to pay to the Claimant the amount of USD 1,500,000.

12. In view of the aforementioned, the Single Judge established that the Respondent failed to remit total amount of USD 1,500,000 payable to the Claimant.

13. In addition, the Single Judge established that the Respondent had delayed a due payment for more than 30 days without a prima facie contractual basis.

14. Consequently, the Single Judge decided that, in accordance with the general legal principle of pacta sunt servanda, the Respondent is liable to pay to the Claimant overdue payables in the total amount of USD 1,500,000.

15. In addition, taking into account the Claimant’s request as well as the content of art. 5 of the settlement agreement, the Single Judge decided that the Respondent must pay to the Claimant interest of 10% p.a. on the amount of USD 1,900,000 as from 16 October 2017 until 9 January 2018.

16. Equally and considering the Claimant’s request as well as the content of art. 5 of the settlement agreement, the Single Judge decided that the Respondent must also pay to the Claimant interest of 10% p.a. on the amount of USD 1,500,000 as from 10 January 2018 until the date of effective payment.

17. In this respect, the Single Judge deemed it appropriate to clarify that, in spite of the objection of the Respondent, the interest rate of 10% p.a. in case of late payment, as stipulated in art. 5 of the settlement agreement, is not excessive as per Swiss law and his own jurisprudence. In addition, such rate was voluntarily agreed by the parties and is to be applied in the present case.

18. In continuation, taking into account the consideration under number II./13. above, the Single Judge referred to art.12bis par. 2 of the Regulations which stipulates that any club found to have delayed a due payment for more than 30 days without a prima facie contractual basis may be sanctioned in accordance with art. 12bis par. 4 of the Regulations.

19. The Single Judge established that by virtue of art. 12bis par. 4 of the Regulations he has competence to impose sanctions on the Respondent. Therefore, bearing in mind that the Respondent duly replied to the claim of the Claimant and taking into account that the Respondent was also condemned to pay overdue payables to the Claimant in the case Nr XXX, the Single Judge decided to impose a warning and a fine on the Respondent in accordance with art. 12bis par. 4 lit. a) and c) of the Regulations.

20. Furthermore, taking into consideration the amount due of USD 1,500,000, the Single Judge regarded a fine amounting to CHF 15,000 as appropriate and hence decided to impose said fine on the Respondent.

21. In this connection, the Single Judge wished to highlight that a repeated offence will be considered as an aggravating circumstance and lead to more severe penalty in accordance with art. 12bis par. 6 of the Regulations.

22. Finally, the Single Judge referred to art. 25 par. 2 of the Regulations in combination with art. 18 par. 1 of the Procedural Rules, according to which in proceedings before the Players’ Status Committee including its Single Judge, costs in the maximum amount of CHF 25,000 are levied and which states that the costs are to be borne in consideration of the parties’ degree of success in the proceedings and are normally to be paid by the unsuccessful party.

23. Taking into account that the responsibility of the failure to comply with the payment of the amounts as agreed in the transfer agreement can entirely be attributed to the Respondent and that the claim of the Claimant has been fully accepted, the Single Judge concluded that the Respondent has to bear the costs of the current proceedings before FIFA. According to Annexe A of the Procedural Rules, the costs of the proceedings are to be levied on the basis of the amount in dispute. On that basis, the Single Judge held that the amount to be taken into consideration in the present proceedings is higher than CHF 200,001. Consequently, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 25,000.

24. Considering the particular circumstances of the present matter, the Single Judge determined the costs of the current proceedings to the amount of CHF 20,000 and concluded that said amount has to be paid by the Respondent in order to cover the costs of the present proceedings.

III. Decision of the Single Judge of the Players’ Status Committee

1. The claim of the Claimant, Club A, is accepted.

2. The Respondent, Club C, has to pay to the Claimant, within 30 days as from the date of notification of this decision, overdue payables in the amount of USD 1,500,000, plus interest at the rate of 10% p.a. as from 10 January 2018 until the date of effective payment.

3. The Respondent has to pay to the Claimant, within 30 days as from the date of notification of this decision, interest at the rate of 10% p.a. on the amount of USD 1,900,000 as from 16 October 2017 until 9 January 2018.

4. If the aforementioned amounts are not paid within the aforementioned deadline, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee, for consideration and a formal decision.

5. The Respondent is ordered to pay a fine in the amount of CHF 15,000. The fine is to be paid within 30 days of notification of the present decision to FIFA to the following bank account with reference to case nr. XXX:

UBS Zurich

Account number 366.677.01U (FIFA Players’ Status)

Clearing number 230

IBAN: CH27 0023 0230 3666 7701U

SWIFT: UBSWCHZH80A

6. The final amount of costs of the proceedings in the amount of CHF 20,000 is to be paid by the Respondent, within 30 days as from the notification of the present decision, as follows:

a) The amount of CHF 5,000 to the Claimant;

b) The amount of CHF 15,000 to FIFA to the above-mentioned bank account (cf. point 5.) with reference to case no. XXX.

7. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittances under points 2., 3. and 6.a) are to be made and to notify the Single Judge of every payment received.

8. A warning is imposed on the Respondent.

*****

Note relating to the motivated decision (legal remedy):

According to art. 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receipt of notification of this decision and shall contain all the elements in accordance with point 2 of the directives issued by the CAS, a copy of which we enclose hereto. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS (cf. point 4 of the directives).

The full address and contact numbers of the CAS are the following:

Court of Arbitration for Sport

Avenue de Beaumont 2

1012 Lausanne

Switzerland

Tel: +41 21 613 50 00

Fax: +41 21 613 50 01

e-mail: info@tas-cas.org

For the Single Judge of the

Players’ Status Committee

________________________

Emilio García Silvero

Chief Legal Officer

Encl. CAS directives